A Debt management plan can be a structured repayment plan enabling you to pay one monthly payment that is distributed between your creditors until the balances have been paid in full, this payment is flexible; supporting you. It is requested that the creditors freeze your interest and charges, that way you can start repaying the actual debt back.
Debt Management Plan Advantages
• A Debt Management Plan is an informal arrangement with a payment you can afford.
• A Debt Management Plan is an informal arrangement that avoids the need for formal insolvency procedures such as an IVA or bankruptcy
• By putting an arrangement in place with your creditors and maintaining it, you may reduce the chances of further action being taken against you
Debt Management Plan Disadvantages
• Creditors may freeze interest and charges for an agreed timescale.
• The arrangements are informal, which means the creditors may change their minds at any time and are not required to withdraw any current recovery plans.
• Interest can continue to be charged on the debts, creditors are under no obligation to freeze interest, should interest and charges continue to be applied, it may take you longer to pay back the debt whilst incurring further charges.
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